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PSST: Patterns of Sustainable Specialization and Trade

20 Pages Posted: 28 Jan 2013  

Arnold Kling

George Mason University

Date Written: January 28, 2013

Abstract

This essay offers an alternative way to look at macroeconomics. The current standard approach uses aggregate supply and aggregate demand (AS-AD). I call the alternative approach patterns of sustainable specialization and trade (PSST). The PSST approach combines many old and new strands in economics. It suggests that the economy is a highly complex system that is constantly adapting to new circumstances, especially opportunities created by technological innovation. We can view employment fluctuations as a reflection of the difficulty that markets sometimes have in making the necessary adjustments, so that for a period of time some workers have extremely low marginal revenue product and as a result become unemployed.

Comments on this paper can be found at:
http://ssrn.com/abstract=2208042

Suggested Citation

Kling, Arnold, PSST: Patterns of Sustainable Specialization and Trade (January 28, 2013). Capitalism and Society, Vol. 6, Issue 2, Article 2, 2011. Available at SSRN: https://ssrn.com/abstract=2208029

Arnold Kling (Contact Author)

George Mason University ( email )

4400 University Drive
Fairfax, VA 22030
United States

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